By: Albert F. Pennisi, Esq.
Pennisi, Daniels & Norelli LLP
97-77 Queens Boulevard Suite 620
Rego Park, NY 11374
Phone: 718-459-6000 Fax: 718-459-6875

Apartment alterations in cooperatives and condominiums are typically controlled by the proprietary lease, the by-laws and rules. The proprietary lease and by-laws provide the basis for the Alteration Agreement in a cooperative. In a condominium restrictions on alterations are typically found in the by-laws and rules.

Apartment alterations should address issues with respect to:

A) Alterations which are structural in nature or affecting the heating, plumbing, electrical or other systems.

B) Alterations that are purely decorative such as painting, cosmetic renovations, wallpapering, carpet removal or other non-structural renovations.

The managing agent of the cooperative or condominium should periodically put the stockholders and/or unit owners on notice that a written Alteration Agreement is required prior to any structural or non-structural work. This notice should be made after review of the proprietary lease, by-laws and rules of the cooperative or condominium, in that the obligations of the unit owners or stockholders should be made clear as to their responsibility to execute an Alteration Agreement prior to commencing any work in the building.

The board and the managing agent should collaborate with legal counsel, an architect and/or an engineer to draft a standard form of Alteration Agreement for both structural and non-structural alterations. These documents should be part of the application provided to all prospective purchasers in the cooperative or condominium, as well as to existing unit owners and shareholders.

A standard form of Alteration Agreement should be adopted to cover topics such as claims (personal injury or property damage), designation of architect or engineer, insurance, damage to the building, hold harmless by apartment owner to condominium or cooperative, hours of work, demolition and air borne contaminants, testing for environmental conditions, plumbing and electrical systems, general building systems, liability and indemnification, building and/or adjacent owners, security, relocation and an advance deposit for damages to the building.

A series of riders should be drafted to cover issues such as levels of lead based paint contamination, asbestos, plumbing/heating, HVAC, appliances, electrical systems and services, window and wall replacement, terrace construction and/or landscaping, removal and/or replacement of structural portions of the building and/or the interior of the apartment or unit. In addition to the general issues regarding alteration, the agreement should provide as follows:

1. Demolition - Demolition work should be performed with the following considerations and restrictions.

(a) All demolition work should be performed during specific work hours only e.g. Monday thru Friday, excluding holidays, between the hours of 9:00 A.M. and 5:00 P.M.

(b) The cooperative, condominium or its managing agent in their sole discretion may require work to stop due to excessive noise, dust, danger to the structure of the building or affecting the life, health and safety of other occupants of the building.

(c) Limit construction to a maximum number of hours or days. In addition requiring an advance estimate set forth in the agreement, as to the outside date for completion of all demolition.

(d) Provide for the methods of removal of construction debris, subject to the approval of the owner and managing agent.

(e) Provide for specific control of contaminants, such as dust, lead paint and asbestos containing materials

(f). Require a specific pre-filed plan, concerning containment of dust and debris, within the demolition site and/or the protection of the common areas.

(g) Specifically set forth the common areas of the building to be used by construction crews, materialmen, vendors and/or routes for deliveries and disposing of construction debris in and out of the building.

2. Electrical.

(a) The retention of a licensed electrician.

(b) A pre-approved plan for the electrical service, including but not limited to, the location of new risers from the main electrical panel in the building and the route to the particular unit.

(c) The effect on the building's electrical system and the other unit owners resulting from the electrical service requirements of the unit owner

(d) An agreement to reimburse the owner for damage to the building, and/or any repair to the building, caused by the additional electrical service installation.

(e) A fee payable to the building, if necessary and as required by the building's electrical engineer, if electrical service will be disturbed and/or required to be upgraded, due to the electrical installation by the unit owner.

3. Plumbing, Heating and HVAC.

(a) The retention of a licensed plumber.

(b) All installations must be approved by the building engineer.

(c) The installation will not affect, relocate or impede plumbing, heating or HVAC systems or services to the Building or other unit owners.

(d) The unit owner agrees that during the course of the work and/or after completion he/she will pay the cost of any repairs or relocation to the building's plumbing, heating or HVAC systems, caused by the unit owners' installation.

4. Environmental issues.

(a) The unit owner will agree to be responsible for providing prior to the commencement of the work, all required plans and/or permits for the removal, containment and disposal of all hazardous materials, including but not limited to, lead based paint and asbestos.

(b) The unit owner and the Contractor employed will agree to hold the cooperative or condominium harmless, including reasonable attorneys fees, fines and penalties.

5. Certificate of Occupancy.

(1) Effective November 3, 1997, if two (2) apartments are combined, The City of New York no longer requires a new or amended Certificate of Occupancy. Local Law 77 of 1968 provides for the filing with the New York City Building Department of an "Alteration Type II Application" which must be filed, on the certification of an architect or engineer. An Alteration Type II Application will be accepted in place of an amended or new

Certificate of Occupancy, so long as the following procedures are required, and they are as follows:

(a) The combining of apartments shall be permitted either on the same floor or adjacent floors by interior access stairs connecting not more than two stories, and must result in equal or lower number of zoning rooms. New layouts may maintain existing legal non-complying conditions.

(b) Natural light and air requirements shall be in compliance for each new habitable room and shall not be altered under this application.

(c) Egress from any floor of the building (stairs, corridors, passageways, lobby, fire escape, etc.) shall not be altered under this application.

(d) The second kitchen shall be eliminated and plumbing connections shall be capped, unless the approved application plans indicate an alternative use for the connections, such as for washer, dryer, bar sink, new bathroom, etc.

(e) If the units are condominiums, a new tentative tax lot number must be obtained from the Department of Finance for the newly created unit prior to filing.

6. Non-Structural Alterations. A non-structural alteration such as the installation of new cabinets, painting and redecorating, wall units, floors or other work which does not involve the structure, plumbing, heating or HVAC systems can affect the life, health and safety of the residents and the building in general.

This work can cause or result in liability, noise, environmental issues, or security problems to the building.

A short form of agreement should be prepared and distributed to all unit owners and be required in advance of commencement of the work, including certificates of insurance under certain circumstances.

The Condominium and/or Cooperative Board and its managing agent have a responsibility to maintain the building and its systems in good working order and condition as well as to preserve and protect the quality of life of the unit owners and shareholders. The implementation of a written Alteration Agreement including the use or professionals e.g. attorneys, architects, engineers, as well as the requirement for appropriate insurance, and environmental testing, will facilitate the maintenance and preservation of the building, its essential services and structures.

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